Penalty for admitted unaccounted stock sustained where taxable goods were acknowledged and tax remained unpaid.

Penalty under the Rajasthan Sales Tax Act was sustained where the assessee, on oath, admitted that unaccounted taxable goods were found in stock and that tax had not been paid. On that categorical admission, the assessing authority was justified in imposing penalty, and objections based on alleged inadequate opportunity or on the fact that the amount was not deposited in the treasury did not displace the substantive liability. The Tribunal and appellate authority were therefore not justified in setting aside the penalty order.

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Issues: Whether penalty under section 22(6)(b) of the Rajasthan Sales Tax Act was sustainable where the assessee admitted on oath that unaccounted taxable goods were found in stock and tax had not been paid, notwithstanding objections regarding opportunity and mode of recovery.

Analysis: The assessee's statement recorded on oath contained a clear admission that goods worth Rs. 7,899 were unaccounted and that tax at 10 per cent had not been paid. On that categorical admission, the assessing authority was justified in levying penalty. The objections that adequate opportunity was not granted and that the amount was not deposited in the treasury did not warrant interference when the substantive liability stood admitted. The Tribunal and the appellate authority were therefore not justified in setting aside the penalty order.

Conclusion: The penalty under section 22(6)(b) was sustainable and the revision was allowed in favour of the Revenue.

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